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Macroeconomics 1020 > Chapter 7-9 Vocab > Flashcards

Chapter 7-9 Vocab Flashcards

1
Q

Refers to a governments approach toward its own spending and taxation

A

fiscal policy

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2
Q

the difference between net tax revenues and government spending

A

Governments budget balance

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3
Q

total tax revenue received by the government less transfer payments

A

net tax revenue

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4
Q

net tax revenue in excess of government spending on goods and services (positive Balance)

A

Budget surplus

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5
Q

government spending on goods and services in excess of net tax revenues (negative balance)

A

Budget deficit

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6
Q

the sum of the federal governments budget deficit less its surplus (add up all deficit flows over the years then subtract the sum of all surplus over the same time)

A

national debt (public debt)

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7
Q

net tax revenues equal government spending on goods and services

A

balanced budget

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8
Q

when government borrows from its central bank to finance increased spending

A

monetizing the debt

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9
Q

deliberate adjustments in the level of government spending and taxation in order to close recessionary or inflationary gaps

A

countercyclical fiscal policy

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10
Q

the belief that a governments budget should be balanced in each period

A

balanced-budget fiscal policy

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11
Q

provisions of tax laws and government spending programs that automatically take spending out of the economy when it is booming and put spending in when it is slowing down

A

automatic stabilizers

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12
Q

action by gov that tends to push the economy in the same direction it is leaning in

A

procylical

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13
Q

the use of countercyclical fiscal policy to balance the budget over the life of the business cycle

A

cyclically balanced budget fiscal policy

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14
Q

something that is accepted as payment for goods and services

A

medium of exchange

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15
Q

the function of money that allows people to hold and accumulate wealth

A

store of wealth

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16
Q

the function of money that allows us to determine easily the relative value of goods

A

unit of account

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17
Q

anything that is declared as money by gov order

A

fiat money

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18
Q

a type of money that can also usefully function as a commodity

A

commodity money

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19
Q

a banking system in which banks keep only a small fraction of their total deposits on reserve in the form of cash

A

fractional reserve system

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20
Q

anything that is widely accepted as a medium of exchange and therefore can be used to buy goods or to settle debts

A

money

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21
Q

currency in circulation plus demand deposits

A

M1

22
Q

money deposited in a chequing account which is available on demand

A

demand deposits

23
Q

money deposited in a saving account which is available only after notice is given

A

notice deposit

24
Q

all notice and personal term deposits

A

M2

25
Q

non-personal term deposits known as cerficates of deposit

A

M3

26
Q

financial institutions, such as credit unions or trust companies, that share many of the functions of commercial banks but are not defined as banks under the bank act (also known as nonbank financial intermediaries)

A

near-banks

27
Q

the difference between the rate of interest a bank charges borrowers and the rate it pays savers

A

spread

28
Q

the portion of deposits that a bank wants to hold in cash

A

target reserve ratio

29
Q

the part of a company s balance sheet that represents what it owns or what is owed to it

A

assets

30
Q

the part of a company’s balance sheet that represents what is owes

A

liabilitis

31
Q

the total assets less total liabilities of a company (equity)

A

Net worth

32
Q

reserves in excess of what the bank wants to hols as its target reserve

A

excess reserve

33
Q

the increase in total deposits that occur in the whole banking system as a result of a new deposit in a single bank

A

money multiplier

34
Q

the rate of interest that the bank of canada chargers a commercial bank for a loan

A

bank rate

35
Q

the annual rate at which payment it made for the use of money(or borrowed funds) a % of the borrowed amount

A

interest rate

36
Q

the desire of people to hold money as a medium of exchange, that is, to effect traansaction

A

transactions demand for money

37
Q

the desire of people to use money as a store of wealth, that is, to hold money as an asset

A

asset demand for money

38
Q

policy designed to change the money supply, credit availability, and interest rates

A

monetary policy

39
Q

a(n) ______ in the interest rate is caused by either a rise in the demand for money or a fall in the supply of money

A

increase

40
Q

a(n) _______ in the interest rate is caused by either a fall in the demand for money or a rise in the supply of money

A

decrease

41
Q

a policy that aims to increase the amount of $ in the economy and make credit cheaper and more easily available

A

expansionary monetary policy

42
Q

a policy in which the amount of money in the economy is decreased and credit becomes harder to obtain and more expensive

A

contractionary monetary policy

43
Q

the buying and selling of securities by the bank of canada on the open (to public) market

A

open-market operations

44
Q

the keynesian view of how changes in money affect the real variables in the economy

A

transmission process

45
Q

an economic school of thought that believes that a cyclical fluctuations of GDP and inflation are usually caused by changes in the money supply

A

monetarism

46
Q

a formula that states that the quantity of money times the velocity of money is equal to nominal GDP (price x real GDP)

A

equation of exchange

47
Q

the number of times per year that the average unit of currency is spent (or turns over) buying final goods or services

A

velocity of money (or circulation)

48
Q

the interest rate that commercial banks charge one another on overnight loans

A

overnight interest rate

49
Q

the bank of canadas key policy interest rate: it is the midpoint of the banks 50-basis-point operating band

A

target for the overnight rate

50
Q

the rate of interest payable by the commercial banks on loans from the bank of canada

A

bank rate

Macroeconomics 1020 (4 decks)

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